Following is (part of) the transcript of a Senate Judiciary Committee hearing related to energy cost and availability concerns that occurred on May 21st. While this exchange came over the transom, and I have not verified the text, I am accepting it to be valid as stated below. The industry participants invited to this hearing included:
Robert Malone, Chairman and President of BP America, Inc.; John Hofmeister, President, Shell Oil Company; Peter Robertson, Vice Chairman of the Board, Chevron Corporation; John Lowe, Executive Vice President, Conoco Philips Company; and Stephen Simon, Senior Vice President, Exxon Mobil Corporation. (Pictured above)
During the hearing, “Senator Orrin Hatch walked Shell Oil president John Hofmeister through the Democrats’ latest efforts to block energy independence:”
HATCH: I want to get into that. In other words, we’re talking about Utah , Colorado and Wyoming . It’s fair to say that they’re not considered part of America ‘s $22 billion of proven reserves.
HOFMEISTER: Not at all.
HATCH: No, but experts agree that there’s between 800 billion to almost 2 trillion barrels of oil that could be recoverable there, and that’s good oil, isn’t it?
HOFMEISTER: That’s correct.
HATCH: It could be recovered at somewhere between $30 and $40 a barrel?
HOFMEISTER: I think those costs are probably a bit dated now, based upon what we’ve seen in the inflation…
HATCH: Well, somewhere in that area.
HOFMEISTER: I don’t know what the exact cost would be, but, you know, if there is more supply, I think inflation in the oil industry would be cracked. And we are facing severe inflation because of the limited amount of supply against the demand.
HATCH: I guess what I’m saying, though, is that if we started to develop the oil shale in those three states we could do it within this framework of over $100 a barrel and make a profit.
HOFMEISTER: I believe we could.
HATCH: And we could help our country alleviate its oil pressures.
HOFMEISTER: Yes.
HATCH: But they’re stopping us from doing that right here, as we sit here. We just had a hearing last week where Democrats had stopped the ability to do that, in at least Colorado .
HOFMEISTER: Well, as I said in my opening statement, I think the public policy constraints on the supply side in this country are a disservice to the American consumer.
The committee’s Democrats attempted no response. They know that they are largely responsible for the current high price of gasoline, and they want the price to rise even further. Consequently, they have no intention of permitting the development of domestic oil and gas reserves that would both increase this country’s energy independence and give consumers a break from constantly increasing energy costs.
Juice readers. Care to weigh in on this Republican assessment?
Hmmm. If I was a conspiracy theorist I might suspect that once a dem gets the white house that these oil reserves might suddenly become available.
The only real energy independence is to get away from slavery to the oil companies, and make our own power. Both for home and for charging a plug-in Electric car.
There is no free market in oil; the few monopolistic oil companies — Standard Oil of California (Chevron), Standard Oil of NY-NJ (Exxon), BP, Shell and Conoco-Phillips, control the market and set the prices and the profit they make.
Sen. Hatch is assuming that we can’t get free of Big Oil, and must be subservient to the oil mongers forever, paying whatever they want.
Hatch’s assumption is wrong.
There is an alternative, which the Republicans and Democrats are both suppressing and not talking about. Republicans are pandering to Big Oil, and the Democrats to the Unions, both fear letting electric cars be sold on the free market.
If you could buy an Electric car, such as our Toyota RAV4-EV, last sold in Nov., 2002, the money you saved by not buying gasoline would pay for a solar electric rooftop system in less than 3 years.
The average driver goes less than 1200 miles per month; existing plug-in all-electric cars can do this using at most 300 kilo-Watt-hours (kWh) per month, easily supplied by off-peak capacity that is currently unused, or by a modest solar rooftop system.
That’s the only real energy independence. Solar power and Electric cars.
Save the oil for those needing to make long trips and for airplanes, but for the 80% of normal driving on the daily grind, electric cars are fun and proven successful.
We are proof.
We have driven about 600,000 miles in Electric cars since 1997, avoiding purchase of almost 30,000 gallons of gasoline in an average car (20 mpg). This doesn’t mean eliminating ALL gasoline, but a lot of oil WAS replaced by electric we made ourselves. It turns out that a LOT of driving is done locally!
A fraction of that 28,000 gallons of avoided gas paid for our solar system in 3 years. After that, we got our electric “for free”, both for driving and for household electric, with the added benefit of a battery backup in case of grid failure. If we choose, we can truly go “off-grid” if SCE fails, our batteries will last until the next sunny day.
For long trips, politicians should force car makers to build a plug-in car with a gas genset to power it when the batteries get low. But many might prefer to just drive to the airport or train station, to go to SF or NY.
The idea of drilling out the last oil, converting coal to oil, using natural gas to boil the tar sands into heavy oil, and deep-water drilling of oil is self-defeating.
Whether or not there’s a supposed shortage of oil, or “peak oil”, is not relevant — there’s only a finite amount of oil, obviously.
The faster we use it up, the faster it’s gone, and the worse the crash will be when the inevitably reckoning comes.
We know energy independence using EV-PV is possible, actual and real: failure to pursue it, in this fragile world environment, would be a dangerous timidity and a failure to use our American ingenuity and talent.
Rather, we need leaders to implement a crash program of “Solarizing America”, putting solar panels on rooftops, parking areas, in patios and other sunny places, and building millions of plug-in hybrids and Electric cars to soak up the excess electric power they produce.
If people could buy plug-in cars, solar power would be self-funded from the money that DOES NOT go to Big Oil to waste drilling out the last oil.
For less than the cost of the War in Afgan and Iraq, plug three years’ defense budgets, we could afford to GIVE AWAY 100 million EV1-class plug-in cars (up to 140 miles range) PLUS 100 million 2.5 kW solar systems to go with the oil-free car.
Why continue the psychodrama of burning oil?
Funny thing, the oil extraction and refining industry is the largest industrial user of electric power and natural gas in California.
The electric energy it takes to process a 42-gallon barrel of oil into gasoline (140 kWh) will take an EV1 just as far (840 miles) as the REST of the barrel carries our average Internal Combustion car at our fleet average of 20 mpg.
And that doesn’t take into account refinery natural gas, subsidized water for refinery cooling, health damage from auto and refinery emissions, oil spill and oil fire costs, oil transport, oil diplomacy and oil wars.
Well said.
The sad part of this tale is that we have been aware of the need to break away from OPEC since the days of Jimmy Carter 35 years ago when I recall standing in long lines at gas stations waiting to fill up on alternate days of the week based on an odd/even license plate number system.
And this is not a slap at Democrats. Every president since that time put their heads in the sand by failing to address and resolve this dependence on imported oil as we continue to drive Hummer’s, huge SUV’s and the like simply because we can.
While I agree that electric cars and hybrids can offer a reduction in oil consumption, we should not close the door to opportunities to meet the current need that is buried just beneath our feet.
What Hatch doesn’t account for is the environmental damage that would be caused by mining these oil reserves. And, as Doug states, oil is a non-renewable resource that will eventually run out. Let’s not do a Scarlett O’Hara and think about it tomorrow. There are alternatives available today if politicians have the guts to stop pandering to big oil companies and unions and seriously support renewable alternatives.
I can almost hear the Heston’s out there ‘you’ll pry this gas nozzle from my hand when I’m cold and dead’ (something like that).
Well phrased comment on the electric car. I can hardly wait to buy one. I’ll be part of your electric revolution.
Good evening Doug. The following data comes from Wikipedia which reports that “there were an estimated 247,421,120 registered passenger vehicles in the United States according to a 2005 DOT study”. Think about how many diesel burning trucks are included in that number as you promote solar power vehicles. Are you saying that we should all park our cars and trucks than place orders for and wait to receive solar cars and trucks? We need to face reality. One quarter billion registered vehicles in the USA will not be replaced overnight.
As an aside. Having worked in the area of power electronics for many years some colleagues once built a solar race car that competed in Arizona. As such I am well aware of that technology.
Jill Patterson.
Perhaps you will tell all of the trucking companies that their vehicles will carry tons of cargo up and down the hills of California running on solar or electric power. We have some tough choices to make. Don’t put your head in the sand. Until you can deliver an alternative powered vehicle for the trucks that bring our food to the corner supermarket’s, manufacturing centers and big box stores and shopping malls, than please tell the Juice readers your solution to this energy challenge.
Yes, Waste Management Inc. has a fleet of natural gas powered garbage trucks. Can you tell us of any other major company with similar power?
Email from a Mission Viejo friend.
Hi Larry
I believe if you look back to 2004 or 2005 you will find that the republican majority shut down legislation to open up domestic reserves in the shale and Anwar development areas in the energy policies. ( per today’s Lou Dobbs radio interview with Tony Perkins close to 4PM). So many of our reps both dems and republicans are not serving the American citizens and their needs. They are only wavering back and forth between corporate and other business and socioeconomic groups that we ordinary Americans are being denied our American way of life dreams. Those same leaders of the oil industry are also pulling down outrageous salaries (eg from 2mill for an acting VP thru 14 mill per year) while the American consumers are being robbed of their stagnant wages and standard of living at the gas pump, staples and necessities of life. I am and never will associate myself with any political party but remain an independent voter. As a side note; from the early 70’s when Fluor was building the coal gasification plant in Johannesburg South Africa the energy companies were attempting to develop the shale oil in the four corners area of the US. In Canada they have been developing and producing the Athabasca tar sands in the province of Alberta from the 1950’s thru the present. Canada is either the 2nd or 3rd largest exporter of crude to the US! –either ahead of Venezuela or behind not sure which. My statistics may not be exact but they are close enough to indicate how our leaders are not responding to the energy needs in this country. One other tidbit; if you check into this I think you will find that the major oil companies in the US own the companies that are dominant in the solar field — I wonder why we do not have very much solar application in the US? Germany is the leader in solar technology and application in the world! In addition when I worked in Germany I noticed that almost everything that one purchased was “Made in Deutschland”. A far cry from what we see here in the US today. This is still the greatest country in the world but our leaders are more worried about their own self interests than in trying to preserve our way of life. Dems or Republicans, there is no difference when it comes to the needs of Americans — they are awol.
Larry, I like your friend.
To Friend from Mission Viejo: I believe Canada is the Number 1 exporter of crude to the USA.
And i could not agree with you any stronger. Our leaders on both sides of the aisle have failed us miserably.
From city councils to Washington, DC, our politicians only appear interested in serving our needs in an election year, then it is back to business as usual – tending to the demands of special interest.
And yes, we are the greatest nation in the world -and we are made great because of our citizens, but until we elect officials who will uphold their oaths, keep their promises and protect our values, we will continue to have less and less of a voice in our republic.
The cost of a campaign – any campaign – is now out of the reach for the average American citizen.
If all private individual transportation was magically converted to electric rather than gas, there wouldn’t be enough power produced to power them from conventional means. There is also the issue of all the toxics and heavy metals that are involved in battery powered vehicles. What do we do with all that heavy metal when they’ve finished their life cycle? As well there is the issue of getting the raw materials used in them to begin with. Once again, we would be reliant on importation of the raw materials from countries that have lower environmental standards than we do. So, we pollute their land and workers not ours, that’s real responsible. No current battery technologies are “clean” to produce or recycle.
Yes, IF you can afford to purchase enough solar Photo Voltaic panels at current prices you might be able to power your home and vehicles. But the current cost of PV is higher than most regular folks can afford. I was looking into reroofing the house last summer, prior to my wife loosing her job, and I was shocked by the complexity and cost of PV roofing and the regulations surrounding them. The return on investment was longer than the terms I could get to finance the installation of both the PV panels and the battery bank/inverter installation. My roof is perfect for installation and in need of a new roof, so the time is right, but price and hoops to jump through aren’t.
Under current regulations you can “sell” the power back to Edison, but only at a zero sum offset to the benefit of Edison. They can bill you for power that you use, but they will not pay for any excess power you produce and give to them above what you have used. So either you still buy electricity or you’re overproducing and giving to the grid for free. That’s not very fair and certainly isn’t encouraging solarization or renewable energy.
Who was it that brought this confusing and irrational regulation to the market? The party that rules in the legislature in Sacramento. The same folks Larry told us about on the federal level. Yes, there is seemingly a union component to this, as well as a centralization issue that seemingly can’t be overcome politically by the usual suspects in either party. Decentralization of power isn’t in the best interests of those who preach either big business or big government. Self generation like home schooling is a threat to the established powers that be.
Larry’s real question revolves around who we pay for our energy and how much, in the short term, prior to decentralizing our power grid. Petroleum products will have to fill that gap at least for the foreseeable future. I don’t have to like it, but I do need to be honest, for now I would rather pay Americans for my energy than export all our money overseas. That will be far more detrimental to all of us than the environmental problems here at home. When we are forced back into the pristine wilderness to cut down our forests, or collect surface coal chips, just to stay warm and cook what little food we have left from our idiotic ethanol programs, it will all be too late.
The use of new and exciting “printed” PV panels are now beginning to be manufactured. They along with LED and OLED’s to produce less expensive and far more efficient lighting, with less heat. Along with solid state refrigeration will all help in the long term. The real problem is bridging the gap between now and then. Drilling offshore, mining coal, oil sands, shale, should all be explored here in our own country NOW. Yes, we need to exercise restraint and control as well as mitigate environmental problems, but we can do it. We have the technology and the will. Lets get it done HERE and now.
Even if you believe that Dick Cheney is bad, is he worse than (insert name of oil producing countries leader here), does he subjugate woman, practice genocide on other minorities within his country, is he out to kill Americans? (Ok, Texas lawyers don’t count!) Do we need to change our current situation and dependence on foreign oil? You better believe it! Maybe we can even get the H2 market moving here in a short while. I would love to see that, I’ve only been preaching that for some 30 or so years. I believe H2 would be able to replace diesel or natural gas for heavier needs as well as long haul transportation.
BTW, Germany made it a mandate in their legislature to solorize the nation, we should too. As well, some of the world leaders in small solar installations are not oil companies or power companies, they are the electronic giants from the orient. However there are some very sound American companies looming large and poised to make great strides in manufacturing inexpensive, efficient and reliable flexible PV panels.
Just so you know, all that oil in Anwar and in the oil shale discoveries will last us about 2 years max.
I have no doubt that when we start getting desperate for oil, we will drill there.
The Republican plan is that when we drill this sucker dry we can fly in spaceships and find another planet to use up!
Thank you Carl.
Very clear and sound comments.
Email from Lake Forest.
“Dear Larry, I appreciate and share your concern for the basically idiotic and possibly economically catastrophic policies embraced by our idiots in congress. Getting back closer to home, will Crown Valley parkway EVER be finished??? and who’s paying for all the annual shennanigans there??? Keep up the good work,…”
Gilbert note: Widening of Crown Valley Parkway form I-5 to Ladera Ranch. Another CIP in Mission Viejo that will come in on time and under budget. What are you smoking Larry?
Lake Forest friend.
while the city of MV gave Roger Faubel Public Affairs Inc. a “not to exceed Contract of $100,000, to provide community education and public outreach services for the Crown Valley Parkway Widening Project” back in Oct of 2005, we have not heard from nor seen Roger in city hall accept to accept an award (as he serves on the SMWD.)
This project delay is also connected to other delayed roadway improvement activites. Namely the work on Oso Parkway and La Paz Road at the railroad overpass. Other than the delay in starting those two projects due to the Crown Valley delay, and knowing that material and labor costs continue to increase, who will pick up the higher project cost for those infrastructure efforts? SDG&E or Us,the taxpayers of Mission Viejo.
Did Faubel Public Affairs keep us in the loop over the past 18 months while this project has dragged on. Nope. Although I am sure that he cashed every check. Yes, we did see some data early on but the project was to be completed between 12 to 18 months.